The owners of a Southern California janitorial company that provides cleaning staff to major hotels in San Diego, Los Angeles and Riverside counties were indicted on charges of workers’ compensation fraud, payroll tax evasion and extortion, authorities announced Monday.

Hyok “Steven Kwon and his wife, Woo “Stephanie” Kwon — the owners of Good Neighbor Services — each face up to 31 years in prison if convicted.

Good Neighbor Services provides cleaning staff to major hotels such as the Hotel Del Coronado, Loews Coronado, La Costa Resort and Spa, the Ritz Carlton, Four Seasons and the Hilton and Hyatt hotel chains.

The investigation — which began 2 1/2 to three years ago — allegedly uncovered a methodical and systematic shell game involving six straw owners. Those straw owners were used to conceal the existence of hundreds of hotel workers to avoid paying millions of dollars in insurance premiums and payroll taxes, the government alleges.

“These defendants lied on the backs of their employees, who were cleaning rooms in some of the most prestigious hotels in California,” said San Diego County District Attorney Bonnie Dumanis. “If employees got hurt on the job, they were threatened with being fired.”

For nearly a decade, Good Neighbor Services concealed its real payroll information in order to fraudulently obtain workers’ compensation insurance from multiple companies, the indictment alleges.

In doing so, the janitorial company avoided paying more than $3.6 million in insurance premiums and evaded paying more than $3.3 million in payroll taxes, according to the government.

Employees said they did not receive overtime pay or workers’ compensation benefits when they were injured on the job, and feared retaliation if they reported their injuries, Dumanis said.

One employee said she had to repeatedly ask for medical attention for her injury. When she was finally sent to a “doctor,” she found out later the Kwons sent her to a dentist rather than a physician, court papers allege.

“The Kwons treated their workers like chattel when they fraudulently did not provide workers’ compensation insurance coverage for their workers,” said state Insurance Commissioner Dave Jones.

“While hundreds of GNS employees working as janitors put in long hours to make money for the Kwons, Steven and Stephanie Kwon allegedly put the health and well-being of these workers at risk and ripped off at least $6.5 million that should have been paid for workers compensation and unemployment insurance,” he said.

Steven Kwon, 62, pleaded not guilty to the charges this Monday afternoon and was ordered held on $1 million bail. Stephanie Kwon, 59, is scheduled to be arraigned later this week.

A half-dozen co-defendants — Melquiades Brizuela Jr., Manuel Rodriguez, Veronica Lucas Cuin, Aimee Sunmyung Kwon, Daniel Kwon and Hyun Bung Chae — have been charged with workers’ compensation premium fraud and tax evasion for their alleged involvement in the scheme. They are expected to be arraigned on Jan. 5.

—City News Service

Owners of Janitorial Service to Hotels Indicted on Worker’s Comp, More was last modified: December 21st, 2015 by Debbie L. Sklar

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